Bitcoin’s price has plummeted to historic lows, hovering just above $63,000. This decline is making it less economical for miners to operate, with large-scale computing companies unplugging their equipment due to high electricity costs and falling revenue. The average cost to mine one Bitcoin has reached a record high of $87,000, making it an unprofitable proposition.
Investors are selling off their reserves, comparing the current downturn to China’s 2021 crypto mining ban. Mining company CEO Harry Sudock blames winter storms raising electricity prices and recent tech market declines for the decline. The cryptocurrency’s value has been volatile in the past, but this decline comes at a striking moment when crypto is typically seen as a safe-haven asset.
Investor Michael Burry warned of a potential “death spiral” for the broader economy if Bitcoin continues to fall. He also speculated that gold prices could drop if tokenized metals futures collapse. Instead, companies are pivoting from mining crypto to powering AI models, but it’s unclear whether this will be a safer bet as investors start to lose confidence in AI too.
The current market downturn highlights the challenges facing Bitcoin and its future prospects remain uncertain.
Source: https://futurism.com/future-society/bitcoin-crashing-miners-unplugging-equipment